2014-15 VICTORIAN BUDGET
The Victorian Budget for 2014-15 was released on 6 May 2014. As the Government’s final
budget ahead of the 2014 Victorian election, there is a considerable new expenditure on
transport infrastructure as the state moves towards the election campaign.
Funding in the budget has focused on transport infrastructure projects, along with selected
funding of education facilities. Long-term funding commitments are made for the second
phase of the East-West project and the Melbourne Rail Link project, which will construct a
tunnel from Southern Cross to South Yarra via Montague and Domain. This project also
includes a rail link to the airport and will result in each suburban line travelling on dedicated
tracks.
For councils, the budget has focused on metropolitan planning and some community
infrastructure funding (such as kindergarten, multicultural infrastructure and sporting
facilities).
No funding has been provided in the budget for the renewal of the Country Roads and
Bridges program or the Putting Locals First or Local Government Infrastructure program.
These programs are scheduled to conclude at the end of 2014-15 and the MAV will focus on
achieving a commitment to extend these vital projects for a further four years.
No additional allocation was provided for public libraries following the conclusion of the
Tomorrow’s Library project and the MAV will continue to campaign for this matter to achieve
a positive outcome for councils.
1
Assessment against MAV Budget Submission
The following table provides a comparison between the issues highlighted in the MAV
submission and the funding commitments made in the 2014-15 Budget. With the focus of the
budget primarily on delivering major infrastructure initiatives, it is unsurprising that many of
the priorities included in our submission have not yet been funded.
Table 1: Assessment of MAV requests
Rural and
regional
infrastructure
Infrastructure
investment in
growth areas
Powerline
relocation
Scheme
Public library
funding
Flood
infrastructure
Roadside
weeds
Planning
MAV REQUEST
Continuation of the Country Roads
and Bridges program for four years
and renewal of the Putting Locals
First and Local Government
infrastructure programs
Funding to support the Plan
Melbourne implementation,
particularly to support Melbourne’s
growth areas
Funding for the reinstatement of the
Powerline Relocation Scheme
BUDGET 2013-14
No funding committed in the Budget. The
programs are in their final year in 2014-15.
Commitment to the current program
funding with an appropriate
indexation factor for current service
delivery
Progressive increase in the recurrent
funding over four years to increase
the total annual contribution by $10
million per annum
$20 million over four years for the
extension of the Living Libraries
program, including indexation future
program indexation
Continued funding of $1m per annum
for public libraries to support the
Premier’s Reading Challenge
No commitment within the budget papers
Further investment in local flood
studies to identify priority areas for
intervention
Longer term commitment to funding
the new responsibilities that arise
from the CALP Act review
Development of a whole-ofgovernment service and delivery
plan for the implementation of Plan
Melbourne and Regional Growth
Plans
Support for rural councils’ planning
activities
$7.6 million in 2014-15 for the state to
implement its responsibilities arising from the
flood and drainage reviews
$4 million over four years for peri-urban
areas
Support for councils and the state in
the implementation of planning
schemes
Plan Melbourne received $11.2 million in
funding over four years, the Metropolitan
Planning Authority $51.6 million and $3.1
million over four years to support Regional
Growth Plans
Significant investment in
infrastructure, including transport,
education and health. Concentrated
on metropolitan infrastructure.
No commitment
Many of the transport infrastructure projects
are consistent with this item, although a plan
is yet to be produced.
$9.2 million over four years for the extension
of the Rural Council Planning Flying Squad
INITIATIVES OF INTEREST TO LOCAL GOVERNMENT
The following matters have been funded through the 2014-15 Budget which are of direct
relevance to local government:
Planning

$11.2 million over four years for the implementation of Plan Melbourne

$51.6 million over four years for the Metropolitan Planning Authority, of which $51.3
million over three years will be collected in revenue through a new levy to be placed
on development applications for projects with construction costs of greater than $1
million. Given the absence of a substantive review or increase in planning fees
collected by the councils, the MAV again calls on the Victorian Government to review
the adequacy of planning fees.

$9.2 million over four years for the continuation and extension of the Rural Council
Planning Flying Squad to assist rural councils with strategic planning and other
planning initiatives

$3.1 million over four years to support the implementation of Regional Growth Plans

$2.5 million over four years for the establishment of the Victorian Design Review
Panel
Transport

$3.2 billion over the next four years for the construction of the Western section of the
East-Link project

$830 million over four years to commence the Melbourne Rail Link project, which will
provide a rail link to the Melbourne airport and a new tunnel running from Southern
Cross to South Yarra via Domain and Montague. The project will also un-tangle the
metropolitan rail lines.

$390.4 million over four years to reduce the cost of public transport travel across
zones one and two; removal of fares for tram travel within the Melbourne CBD and
Docklands

$109 million for the operations of new regional rail trains and new bus services to
support the Regional Rail Link project

$100.3 million over five years for maintenance and operation of the Regional Rail Link

$95 million over four years for arterial road maintenance and $50 million over two
years for capital spending on arterial road restoration

$26.8 million over four years for operational funding for the removal of rail crossings,
with $679.3 million in capital funding

$2.5 million over four years for the establishment of the Victorian Design Review
Panel
Local government governance

$10 million over four years for the Local Government Inspectorate

$2.5 million over four years for the introduction of the local government performance
reporting initiative
Local and community infrastructure

$2 million over two years for the Community sports facility program, which will assist
in building and improving local sporting facilities

$35 million over two years for the strategic sporting infrastructure program, including
the Bendigo Aquatic Centre and the Moorabbin community reserve project

$18 million over four years for the Supporting Small Business initiative, which
includes $4 million for the Local Area Capital Improvement program which will fund
councils to revive strip shopping centres

$6.0 million over two years for a multicultural community infrastructure fund
Children’s services

$2.1 million over three years for the maternal and child health service reform project

$15 million children’s facilities capital program before 30 June 2014

$8.4 million over four years for the early years strategic planning

$3.8 million over two years for early childhood workforce development
Emergency management

$15.9 million over two years for bushfire recovery and reconstruction, including $2
million in 2013-14 for a clean-up package for Morwell following the mine fire and $1.6
million for emergency relief and rellocation

$7.6 million in 2014-15 to support the implementation of the various flood and
drainage reviews, including the construction of flood levees

$11.6 million over four years for pre-formed incident management teams

$5 million over two years for the Morwell mine fire inquiry

$39.7 million over four years for the Regional Connectivity program, which will
address mobile phone coverage gaps in fire and flood prone areas and internet
connectivity gaps on major rural rail corridors.
Environment

$4 million over four years for the eradication of weeds on public land through the
Urban Fringe Weed Management program, which includes a matched funding
component with local government. The program will be concentrated in peri-urban
areas.

$6.3 million over four years for the establishment of an illegal dumping strike force to
target the dumping of industrial waste
Human services

$20.8 million over four years for the Home and Community Care

$12.8 over four years for addressing violence against women and children and an
additional $600k over two years for the development of improved protocols, data and
tools for the acute health care sector to identify and respond to violence against
women and children

$33.4 million over four years to cater for growth in the number of pensioner
concessions, including council rate concessions

$2.9 million over four years for the Neighbourhood Houses Coordination program
OVERALL ECONOMIC POSITION
The underlying financial position of the Victorian Government has improved significantly over
the past 12 months, with booming state taxes benefiting the budget’s bottom line. Overall
taxation revenue is forecast to increase by 7.2 per cent in 2014-15. While economic
conditions have declined substantially since last year’s budget, improving conditions and a
boyant property market are forecast to contribute strongly to the State’s bottom line in future
years. Unemployment is anticipated to be currently at its peak level, before declining to trend
levels and consumer prices are expected to be modest in the short and medium term. Strong
population growth is again forecast.
The Budget forecasts a surplus of over $1.3 billion in 2014-15, with surpluses averaging $2.7
billion over the four years to 2017-18.
Table 2: Victorian economic projections
Real gross state product
Employment
Unemployment rate
Consumer price index
Wage price index
Population
2012-13
Actual
1.6
0.8
5.7
2.2
3.3
1.9
2013-14
Forecast
2.00
0.75
6.25
2.75
2.75
1.8
2014-15
Forecast
2.50
1.25
6.25
2.25
3.25
1.8
2015-16
Forecast
2.75
1.50
6.00
2.50
3.50
1.8
2016-17
Forecast
2.75
1.50
5.75
2.50
3.50
1.8
2017-18
Forecast
2.75
1.50
5.50
2.50
3.50
1.8
Source: Budget Paper Number 2, p13
Grants and Transfers to Local Government
As shown in the table below, total grants and transfers to local government are expected to
increase in 2014-15, primarily as a consequence of the end of pre-payment of Financial
Assistance Grants. Some caution should be exercised in interpreting these data however, as
it incorporates a range of funding programs including the Commonwealth financial assistance
and road grants. The Financial Assistance Grants program has included early payments in
recent years which influence comparisons over time. HACC and MCH funding programs are
excluded from these figures. In addition, major grants deriving from the Department of
Treasury and Finance relate to disaster reimbursements and are therefore only provided in
the aftermath of major disaster events.
Table 3: Grants and transfers to local government ($ thousand)
Department of Education and Early Childhood
Development
Department of Environment and Primary
Industries
Parks Victoria
Catchment Management Authorities
Department of Health
Department of Human Services
Department of Justice
Country Fire Authority
Department of Premier and Cabinet
Department of State Development, Business and
Innovation
Department of Transport, Planning and Local
Infrastructure
Department of Treasury and Finance
Total grants
2013-14
Budget
2013-14
Revised
2014-15
Budget
7 529.2
42 529.2
546.2
21 790.7
22 134.1
27 936.3
62.5
765.0
..
4 006.0
6 164.4
926.7
10 495.6
69 312.9
13.1
156.0
..
4 006.0
8 562.4
360.9
10 557.6
88 147.0
13.5
153.2
..
4 106.2
11 263.6
369.9
8 908.6
93 050.2
723 778.2
463 743.8
734 224.8
14 704.0
859 535.1
138 626.3
778 836.4
22 855.2
903 427.7
Source: Budget Paper 3, p349.
FURTHER INFORMATION
All State Budget papers and media releases listed by Ministerial responsibilities are available
on the Victorian Government’s budget website.
For further information about the members brief, contact Owen Harvey-Beavis.
Website link: www.budget.vic.gov.au